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Gold holds above $4,400 after US CPI meets expectations

XAU/USD was last around $4,429, up 1.4% on the day, after the CPI report weighed on the US dollar and Treasury yields.

Reported · Written up by our desk · Precious Metals

Gold prices extended gains above $4,400 on Wednesday as traders digested US inflation data that broadly matched expectations, with XAU/USD around $4,429 and up 1.4% for the day.

The US Consumer Price Index rose 0.1% in July after falling 0.4% in June, with the annual rate easing to 3.4% from 3.5%. On a monthly basis, CPI increased 0.2% after staying flat, and the yearly rate slowed to 2.5% from 2.6%.

Following the release, the US dollar and Treasury yields fell, supporting bullion. The US Dollar Index was near 99.70, down 0.1%, while the 2-year Treasury yield was about 4.180% after dropping roughly 4 basis points from the daily open.

The report left the market largely unchanged on the Fed path, with traders still pricing a 44% chance of a September rate hike, while higher oil prices and inflation above the Fed’s 2% target were noted as upside risks. Technically, gold is trading above the 50-day simple moving average and just over the 100-day level, with the next major overhead area near the 200-day SMA around $4,500.

Latest closeGold $4,292.50 ▼0.6%|Dollar index 101.29 ▲0.2%

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